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Does public financial support stimulate innovation and productivity? An impact evaluation

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  • Aboal, Diego
  • Garda, Paula

Abstract

This paper contributes to the empirical literature that evaluates the effects of public financial support to innovation on innovation expenditures, innovation itself and productivity in developing countries. Propensity score matching techniques and data from Innovation Surveys are used to analyse the impacts of public financial support to innovation on Uruguayan firms. The results indicate that there is no crowding-out effect of private innovation investment by public funds and that public financial support in Uruguay seems to increase private innovation expenditures. Financial support also appears to induce increased research and development expenditures and innovative sales, with these effects being greatest for service firms. Public funds do not, however, significantly stimulate private expenditures by firms that would have carried out innovation activities even in the absence of financial support.

Suggested Citation

  • Aboal, Diego & Garda, Paula, 2015. "Does public financial support stimulate innovation and productivity? An impact evaluation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    • Handle: RePEc:ecr:col070:38832
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    Cited by:

    1. Aboal, Diego & Crespi, Gustavo & Perera, Marcelo, 2020. "How effective are cluster development policies? Evidence from Uruguay," World Development Perspectives, Elsevier, vol. 18(C).
    2. Maximiliano Machado, 2021. "Heterogeneous Innovation Persistence: Evidence From Uruguayan Firms," Documentos de Trabajo (working papers) 21-04, Instituto de Economía - IECON.
    3. Diego Aboal & Gustavo Rojas & Belén Servín & Paz Queraltó, 2019. "How Effective are Innovation Support Programs to Stimulate Innovation? Evidence from Paraguay," Documentos de Trabajo 17233, The Latin American and Caribbean Economic Association (LACEA).
    4. Jaureguy, Micaela Vidal & Bianchi, Carlos & Blanchard, Pablo, 2023. "Financial and knowledge barriers to innovation: Complementary and substitution effects on innovative effort," Research Policy, Elsevier, vol. 52(7).

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